The long-term goal of the proposed research is to understand how Wnt signals regulate normal development and cancer. The immediate goal is to refine our understanding of how Wnt signals are transduced by studying Arrow, a single pass transmembrane protein recently identified by the PI. Arrow, together with members of the Frizzled (Fz) family, is a co-receptor for the fly Wnt, Wingless (Wg). A fusion of the Arrow cytoplasmic tail to the Fz2 carboxy-terminus (Fz2-Arr[i]) recapitulates the proximity normally generated during receptor activation by the Wnt ligand, demonstrating that Arrow and Fz2 function as co-receptors. Fz2-Arr[i] functions as an activated receptor that is necessary and sufficient to generate ligand- independent signaling. In the first aim, structure/function analyses of this chimeric receptor, which is locked in the signaling conformation, will be performed to identify domains that may be required for assembly of intracellular complexes that transduce Wnt signals from the membrane to the nucleus. The second aim will identify Arrow-interacting proteins by (a) Immunoprecipitating and micro sequencing Arrow-associated proteins from fly embryos, and (b) a novel and highly sensitive yeast two-hybrid system that allows the isolation of components interacting with a membrane protein, the activated receptor. Fly genetics will then be used to identify the in vivo function of Arrow- interacting proteins. The third aim is based on our finding that Axin, a far downstream component of the Wnt cascade, directly interacts with the Arrow cytoplasmic domain (and therefore the activated receptor). This interaction was unexpected since Axin was previously shown to bind and negatively regulate Armadillo (fly B-catenin), the final cytoplasmic Wg/Wnt pathway component. This raises the possibility that Arrow not only functions as a receptor subunit but also regulates the final step in signaling by binding Axin, thereby freeing Armadillo to enter the nucleus and signal. This hypothesis will be tested by analyzing Wnt signaling in transgenic flies made to express mutant Axin proteins that discriminate between binding to Arrow or Armadillo. Collectively, these studies will provide insights into a signaling pathway that is required for normal development of all species and insights into cancers due to deregulation of these processes.